Schizophrenia is a serious and debilitating psychiatric disorder that affects nearly 1% of the world's population. Within the Veterans Health Administration, total costs in FY 2014 for Veterans with psychotic disorders (of which schizophrenia is the most severe) was over 6 billion dollars. Deficits in cognition ? both non-social and social -- are core features of schizophrenia. The deficits in social cognition refer to the processes that are involved in the perception, encoding, storage, retrieval and regulation of information about other people and ourselves. The problems in social cognition underlie the social disability and reduced functioning of the illness. A greater understanding of social cognitive impairments would provide opportunities for targeted recovery- focused interventions. This proposal will address an unanswered question: specifically how and where in the brain social processing goes awry in schizophrenia. We know which social processing brain systems are relevant to understanding schizophrenia. However, we do not know whether social processing impairments emerge within a particular brain system or between systems when they work together (i.e., are integrated). Only some systems are impaired in schizophrenia. For example, mentalizing, which involves taking others' viewpoints, is clearly impaired in schizophrenia. Affect sharing, which is the automatic activation of emotion in ourselves when we see emotional displays in others, is relatively intact. Empathy (i.e. sharing, understanding, and responding to emotional experiences of another person) is a high-level social processing ability that requires integration among processing systems, including affect sharing and mentalizing. Our knowledge of the neural basis of social processing impairments and social disability in schizophrenia is severely lacking, and the goal of this proposal is to address this knowledge gap. The study will use functional magnetic resonance imaging (fMRI) to examine regional brain activity, seed- based connectivity, and brain network organization in 72 Veterans with schizophrenia and 72 group-matched controls. Clinical assessments and performance-based tasks in social cognition will also be included. The aims will be addressed using three social processing paradigms: 1) A Pain Rating Task in which participants view painful and non-painful images. It activates the affect sharing system. 2) A Director's Task in which participants take the same or different viewing perspective as another person. It activates the mentalizing system. And 3) An Empathic Accuracy Task in which participants monitor the mood of a social ?target? on a video. It relies on multiple social processing systems, including affect sharing and mentalizing. A close evaluation of activation, connectivity, and brain network organization in social processing brain systems will identify specific points of neural vulnerability in schizophrenia. In that way, we can begin to understand how specific disruptions in neural processes lead to impaired social functioning.